The Elbert Files: The impact of immigrants in Iowa

When Simon Elbert and Peter Priester arrived in northern Iowa from Germany 130 or so years ago, they were in search of better lives.

Chances are my great-grandfathers saw one of the many advertisements that U.S. railroads scattered across Europe following the Civil War. The promotions offered fresh starts to immigrants willing to settle in the Midwest.

In more recent times, families from Mexico, Guatemala and other parts of Central America, as well as Bosnia, Vietnam and Sudan, have arrived in Iowa seeking the same things that Simon and Peter did more than a century ago.

One key difference is that my relatives were encouraged to settle in Iowa, while many of today’s immigrants are undocumented and treated like criminals. That’s unfortunate for two reasons. First, it is shameful for us, as children of immigrants, to turn our backs on others who seek the same advantages that our own people yearned for just two or three generations ago.

Second, we need them, because Iowa has been a net exporter of people for as long as I can remember. The only reason Iowa is as strong as it is today is because of immigration back then and now, which brings me to a new study released last week by The Iowa Policy Project in Iowa City.

The study, by Heather Gibney and Peter Fisher, is titled “Immigrants in Iowa; What New Iowans Contribute to the State Economy.”

They estimate that 120,000 foreign-born Iowans, including 47,000 to 75,000 undocumented persons, contribute $64 million annually in state and local taxes.

The study confirms some common perceptions. For example, disproportionate numbers of undocumented immigrants work in meatpacking plants and housekeeping.

But it destroys other myths, including that the undocumented are a drain on the economy.

In fact, the opposite is true, said Gibney.

Undocumented immigrants are not eligible for most government services, including Social Security, Medicare and unemployment insurance, she said. But they pay about 79 percent of the taxes paid by nonimmigrants with the same income.

The lower tax rate is due in part to the fact that undocumented immigrants don’t pay as much sales tax, because they don’t spend as much. The reason: Many send part of their pay back to family members in their native country.

Also 30-50 percent of undocumented workers do not pay income taxes, a situation that can be largely remedied by removing concerns about deportation.

Otherwise, the study found that foreign-born Iowans are not that much different from the rest of us, except that they tend to be younger and have less education. Because they are younger, more of them (83 percent) are of prime working age than Iowa’s population as a whole (61 percent), which is good for our aging state.

Gibney and Fisher added that other studies have found little evidence that immigration negatively affects the wages of native-born workers. But, they added, it is true that unscrupulous employers take advantage of undocumented workers by paying them less.

“Being able to work legally would increase the average wage of undocumented immigrants” by as much as 10 percent, the study said.

The study explains that much of the influx of immigrants from Central American in recent decades was attributable to the North American Free Trade Agreement of 1994 and the devaluation of the Mexican peso. Both initiatives were designed to create more jobs in Mexico, but the opposite occurred when a flood of imports drove Mexican manufacturers out of business and “forced millions of workers to seek economic opportunities elsewhere,” the study said.

“Immigrants make up 4.3 percent of the Iowa population, but they account for 4.5 percent of the economic output ,” Gibney said.

“They came here to work,” she said, which is exactly what Simon Elbert and Peter Priester did 130 years ago.